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A Renewed Focus on Fair Compensation Negatively Impacts Retailer Profits

Increases in minimum wage and stronger labor laws create issues for retailers

The recent emerging focus on the so-called “living wage” has led to an increase in minimum wages across the country. Many states have increased the minimum wage significantly, while others have enacted more moderate changes. In any case, employees who have seen an increase in their wages are rejoicing.

The  impact of the increased living wage has not been good for everybody, however, as retailers have encountered significant stress stemming from the added costs of employees.

Organizations as large as Wal-Mart and McDonalds are already feeling the strain from the increase in wages. Each company posted reduced earnings in Quarter 2 and saw stock prices drop. As the fight for increased wages continues, retailers are likely to experienced ongoing earnings reductions.

How do these increases impact the general public?

Retailers who experienced a dip in profits caused by increased wages are likely to take action to minimize their losses. In some cases, these actions will negatively impact the general public.

For example, retailers may pass the costs on to consumers by raising process or lowering the quality of goods they offer.

Other retailers may cut employees or their hours, making it more difficult for many people to make a living.

Moving forward, it is important for retailers, employees and consumers to find a fair balance.

What does the future hold?

As more and more states and organizations continue to examine the questions related to increased wages, the debate is likely to wage for years. Coming to a clear consensus on fair wages will likely take some time, especially as the costs of living continue to rise across the country.

The near future looks bright for employees in many places, with the shift to higher wages likely to continue.

For retailers, the need to balance the increased costs of wages will continue to be a problem in the short term, but may well become a non-factor in the long run.

We stand for employee rights throughout New York

At Hepworth Gershbaum & Roth, we have high hopes that the question of fair wages will one day be solved. In the meantime, we continue to advocate for employees who have fallen victim to wage theft and other illegal employment practices.

If you feel that you have been denied your rights as an employee, schedule a free consultation to discuss your concerns with one of our New York employment attorneys. Contact us online or call 212-545-1199 to schedule your consultation today.




Contact an employment law attorney in New York today for a free initial consultation and determine whether you have a case. For a free initial consultation, you can contact us online or by phone.

CALL US TODAY! 212-545-1199